Issue Of Limitation Must Be Decided By MSEFC At Preliminary Stage Before Adjudication On Merit: Telangana HC

The Telangana High Court observed that the issue of maintainability, particularly if it is an issue on the question of limitation has to be decided Micro and Small Enterprises Facilitation Council(MSEFC) as the first issue and only thereafter if required would the Council proceed to decide the case on merits.

The Court was considering a Civil Revision Petition against order passed by the MSEFC under  Section 16 of the  Arbitration and Conciliation Act, 1996.

The single-bench of Justice P. Sam Koshi observed, "...when issues touching the sustainability or maintainability of the claim is raised and even if the Council decides the said issue while deciding the case on merits, it goes without saying that the issue of maintainability, particularly if it is an issue on the question of limitation, the said issue has to be decided as the first issue and only thereafter if required would the Council proceed to decide the case on merits."

The Petitioner was represented by Senior Advocate Vikram Pooserla.

The challenge to the order was to the extent that the MSEFC has, on a petition raised by the petitioner, so far as the claim of the claimant being barred by  limitation was ordered to be decided while deciding the claim on merits.

Senior Counsel for the Petitioner cited Supreme Court's decision in Silpi Industries and others vs. Kerala State Road Transport Corporation and another whereby it was held that the provisions of Limitation Act, 1963 applies on the Micro, Small and Medium Enterprises Development Act, 2006 as well. According to him, in terms of the revised Rules of the Telangana State Micro and Small Enterprises Facilitation Council Rules, 2017, Rule 10(3) thereof prescribes that the Council shall not enter upon the merits of the subject matter in dispute till it has decided on any challenge to jurisdiction or any challenge to any of its members. According to him, since the petitioner has already raised categorical objection in respect of the claimant’s claim being barred by limitation, the Council ought to have decided the said issue at the threshold, and only in the event of the said issue being decided against the petitioner, would there be a necessity for entering into the merits of the case and decide the issue.

"In the teeth of the observations made in the various catena of decisions referred supra and taking into consideration the impugned decision by the MSEFC, this Court does not find illegality on the part of the said MSEFC in holding that the issue on limitation raised by the respondent to be also decided while  deciding the claimant’s claim on merits," the Court observed.

The Court accordingly directed that the MSEFC after the pleadings are concluded, to frame the issue of limitation as the first issue and decide the said issue first.

The Petition was accordingly allowed.

Cause Title: M/s K/12 Techno Services Pvt. Ltd. v. M/s Brahma Teja Paper

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